Food Production

In 2003 global food production recovered from its 2002 drop but remained below 2001 levels. Severe weather conditions throughout the world hurt crops. At 883,780,000 metric tons, world coarse grain production for the 2003 crop was above the 869,910,000 metric tons of the 2002 crop but below the 892,420,000 metric tons of 2001. World rice production, at 391,300,000 metric tons (milled basis), was below the 398,600,000 metric tons of 2001 but above the 380,090,000 metric tons produced in 2002. World wheat output, at 550,510,000 metric tons, was below the 566,840,000 metric tons of 2002 and considerably below 2001’s production of 581,860,000 metric tons. World oilseed production grew to 344,930,000 metric tons versus 328,960,000 metric tons in 2002 and 324,900,000 metric tons in 2001. That increase occurred despite the dry weather that reduced the U.S. soybean crop. World beef production in 2003 was 49,789,000 metric tons, slightly below the 51,033,000 metric tons of 2002 but above the 2001 level. Global pork production expanded from 86,030,000 metric tons in 2002 to 87,204,000 metric tons, while poultry meat production, at 52,833,000 metric tons, was unchanged from the previous year.

With global trade in crops remaining near recent levels, global ending stocks fell and prices were strong. Global wheat stocks fell from 201,110,000 metric tons at the 2001 harvest to 127,930,000 metric tons, the tightest in recent years. Global coarse grains stocks, which were 176,540,000 in crop year 2001, fell to 105,940,000 metric tons. Rice and oilseed stocks were also lower. As a result, prices strengthened, especially compared with the low prices of the late 1990s, 2000, and 2001.

Food Aid

Food assistance was again critical for some regions; southern and eastern Africa, especially, struggled with acute shortages. The 2002 crops in southern Africa were sharply reduced by inadequate precipitation, and until the 2003 crops were harvested, millions of people depended on international assistance. Drought in East Africa and political turmoil in Zimbabwe contributed to the hardships, as did the spread of HIV/AIDS in the region, which caused high death rates among the economically active population. North Korea was again unable to provide adequate food for its population. Damaged infrastructure and poor security in rural areas hindered food production and delivery in Afghanistan, and the war and its aftermath in Iraq damaged agricultural production and complicated deliveries of international food assistance.

Agricultural Policy

International Trade Negotiations

The ongoing World Trade Organization (WTO) talks, which had been launched in Doha, Qatar, in 2001, were called the Doha Development Round because they were intended to assist less-developed countries (LDCs) in conducting trade, gaining access to markets in developed countries, and reducing trade-distorting policies of developed nations. The delegates hoped by the end of March to set a framework for a full ministerial meeting in Cancún, Mex., in September. Initial proposals by member states, however, revealed a great disparity of views on reforms. Compromise proved impossible, and the March deadline passed. A measure of agreement between the European Union and the United States reached in August revived hopes that negotiations in Cancún would succeed, but the LDCs were suspicious that the U.S. and the EU were intent on excluding them from the process.

The ministers who met in Cancún in September were unable to move forward. The Americans and the Europeans wanted a loosening of government purchasing, services, and investment as well as the establishment of rules to facilitate trade and regulate competition in exchange for liberalizing their agricultural policies. The LDCs sought specific concessions, including the elimination of export and domestic subsidies to farmers in developed countries and improved access to markets in the developed countries. The ministers adjourned without agreement but with the hope that the process might be rekindled in early 2004.

Following the collapse of the WTO negotiations, U.S. trade policy concentrated on expanding regional and bilateral trade agreements. Negotiations with several states, including Morocco and Australia, were under way, and a trade agreement with four Latin American countries was reached in mid-December. The Free Trade Area of the Americas was one regional association of interest to the U.S., but FTAA talks in November stalled partly over agricultural issues. Brazil, one of the leaders of the group that opposed the U.S. stand at Cancún, wanted agricultural issues to be prominent in the FTAA talks, while the U.S. sought to have agriculture covered in the WTO negotiations.

In June the EU made some changes in its Common Agricultural Policy (CAP). Beginning in 2005, farm subsidies would be partially decoupled; that is, subsidies would no longer be tied to actual farm production. The extent of decoupling would vary by commodity. Support would be cut for producers of butter and powdered milk but not for grain producers. This reform was intended to smooth the way for EU enlargement in 2004. Agricultural policy had been a stumbling block for EU expansion, because most potential entrants had large agricultural sectors.

Genetically Modified (GM) Food

The EU’s moratorium on approvals of genetically modified food products continued to be an issue. In May the U.S., Argentina, Canada, and Egypt went before the WTO to challenge the legality of the moratorium. In July the EU adopted new rules on labeling and traceability of food containing GM material in July. The new rules presented an opportunity to end the moratorium, but they did not defuse the trade dispute because they expanded the scope of previous labeling requirements. Under the new rules food containing more than 0.9% GM material would have to be labeled, and processed products made from GM plants would have to be labeled. Countries that exported GM crops and food products complained of continued discrimination and pressed their case at the WTO.

Meanwhile, global production of GM crops expanded. Most of the soybeans grown in the U.S. and Argentina and a large proportion of U.S. corn (maize) were genetically modified. Farmers in Canada, China, India, Indonesia, and South Africa grew GM crops ranging from soybeans and canola to cotton. At the same time, GM research continued on vitamin-enriched rice, virus-resistant sweet potatoes, drought-resistant barley, and protein-enriched potatoes, all important crops for LDCs. Brazil, which had banned GM soybeans, seemed to be vacillating: authorities there allowed the planting and sale of GM soybeans for one year.

Livestock Disease

Animal diseases were again in the news in 2003. In February a man in Hong Kong died from avian influenza after visiting relatives in China proper. Also in February avian influenza was detected in The Netherlands, and some 20% of that nation’s poultry was destroyed; production in neighbouring Belgium and Germany was also affected. In March Japan temporarily banned U.S. poultry sales following a report of an outbreak of the disease in Connecticut. Later in the year incidences of exotic Newcastle disease (END) in the western U.S. resulted in the placement of affected states under quarantine.

The beef market was disrupted with the discovery in May of a Canadian cow with bovine spongiform encephalopathy (BSE, or mad cow disease). Canadian exports of cattle and beef and other ruminant products were banned. This devastated the Canadian beef and cattle industry insofar as exports, mostly to the U.S., accounted for more than half of the industry’s output. Canadian authorities traced the sick animal’s history and tested other animals but found no additional cases. In August the U.S. allowed controlled imports of Canadian beef and ruminant products, although trade restrictions remained throughout 2003. In late December a cow in Washington state tested positive for BSE, the first case ever in the U.S. Beef prices and stock prices for fast-food restaurants plunged as many countries banned American beef and domestic consumers showed some nervousness. On December 30 U.S. Department of Agriculture officials sought to shore up confidence in American beef production by banning the use as food or feed additives of all animals that were too old or too sick to stand up and by inaugurating a tracking system for all American slaughter cattle.

Country of Origin Labeling

Controversy continued over country of origin labeling (COOL) mandated by the 2002 U.S. farm bill and scheduled to start in September 2004. Advocates said that COOL would certify the safety of meat products and boost demand; opponents argued that the system was too costly, violated world trade rules, and would not increase demand. Decisions on the implementation of COOL were deferred until 2004.

Fisheries

The UN Food and Agriculture Organization (FAO) indicated that in 2001, the latest year for which figures were available, the total production for the world’s capture fisheries decreased by 3.34% from the 2000 figure to a total of 92,356,034 metric tons. The marine capture fisheries recorded a fall of 2,987,823 metric tons to 83,663,276 metric tons, while the output from freshwater fisheries declined 95,963 metric tons to 8,692,758 metric tons. These results overturned the increases recorded during 2000.

Despite this decrease of nearly 2.5 million metric tons, the overall world supply of fish during 2001 remained stable at 130.2 million metric tons, with aquaculture production rising by 2.4 million metric tons to offset the capture fishery falloff. It was estimated that about 31 million metric tons, almost all from industrial marine capture fisheries, were used for reduction to fish meal and fish oil products.

The major reason for the decline in marine fishery production was the continuing fluctuation in the catch of anchoveta (Peruvian anchovy). In 2000 the anchoveta catch recorded a 29.27% increase, while the total production for 2001 declined by 4.06 million metric tons (36.03%), although it remained the top species in terms of total tonnage caught. (SeeGraph.) These fluctuations in the catch of anchoveta were closely related to changing natural and environmental conditions affecting the seas off the coasts of Peru and Chile, most notably El Niño. Excluding anchoveta, global capture production had remained relatively stable since 1995. Of the other top species caught, Chilean jack mackerel jumped from sixth place to third with an increase of 968,340 metric tons (62.86%) over the 2000 catch, while Atlantic herring recorded a 427,708-metric-ton (17.6%) decrease in catch and fell to fourth. Of those species outside the top five caught, blue whiting, chub mackerel, and capelin showed significant increases.

The leading fishing nation was again China, with total production of 16,529,389 metric tons, a small 2.7% decrease from the 2000 figure. There was an ongoing debate over the accuracy of the figures reported for China’s output of both capture fishery and aquaculture production. Many experts believed that China’s figures should be listed separately; the FAO was criticized during 2002 for reportedly overestimating significantly China’s capture production in the organization’s annual fishery statistics.

Peru remained the second top producing nation, despite a decline in anchoveta landings that resulted in the total catch’s dropping by 2,670,000 million metric tons (25.07%) to 7,986,103 metric tons in 2001. The U.S., Indonesia, and India recorded increases in production, while Japan, Chile, and Russia declined in the total tonnage of fish landed and fell in the relative rankings. (SeeGraph.) Outside the top 10 producing nations, the performances of Morocco, which had a 20.8% increase in catch to 1,083,276 metric tons, and South Africa, whose fish catch rose by 17.4% to 755,345 metric tons, were worthy of note.